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tv   Worldwide Exchange  CNBC  November 2, 2012 5:00am-6:00am EDT

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welcome to worldwide exchange. here are your headlines. the final set of numbers on the u.s. jobs market before the election are out in just a few hours forecasts calling for another month of modest but not stellar payroll growth. >> dow, nasdaq post strongest session since mid september. >> the rising cost of sandy, one major risk modeling firm now says the economic losses from the storm could reach $50 billion. >> and china steps insecurity ahead of next week's com you uhe nis party congress. even model airplanes have been grounded.
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if you're just joining us, very good morning to you. this is where we stand. we are at the moment dow 24 points below fair value. let's show you where we is an with you're feuropean stocks. cac down half a percent, ftse 100 down 0.2%. let's show you some individual stocks in focus. losses on friday hurt by a sector wide slump. equipment maker cutting back spending down as you can see merely 7%. rbs coming out with results this morning. this is the uk bank with a
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government owned majority and part nationalized lending reporting an increase in third quarter. deutsche telecom considering slashing it dividend according to reports. let's show you where we stand on the currency markets. the dollar today ahead of the u.s. jobs report. we'll show you sterling-dollar slightly weaker. dollar slightly firmer against the aussie. and dollar firmer against the yen. so bond yields are slightly firmer this morning. 144. ten year spanish yields higher. italian yielder slightly higher but pretty contained. ten year treasuries where we were yesterday.
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let's go to asia. >> following a positive lead from wall street, asian markets wrapped up the trading week in the green. the record $60 billion worth of liquidity into the market this week. shanghai com poise the quaned 2.5% for the week. developers continue to lead the charge as average home prices in china's 100 largest cities up for a fifth straight month in october. blue chips lent support to the hang seng ending at a 15 month high. taiwan markets gained ground, as well, but last week's profit warning for q4. elsewhere the nikkei gained 1.2%
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to a one week high. sharp tumbled after slashing hair four year outlook. kospi finished higher by over a percent. ship builders and chemical stocks had a strong gained, but steam. back to you. >> and the damage estimate from this week's super storm are rising. the mcis due to the flooding of the subway system and tunnels and loss of business because of power outages across the storm's path. >> new york state will bear a third of the costs, new jersey about 30%, pennsylvania a fifth and other states 16% the total.
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fuel supplies still a major issue. many gas stations running low. bp says its brooklyn terminal has resumed operations, but in a a third of its area gas stations remain closed. colonial pipeline says its terminal in linden, new jersey will resume partial dwlifryes. should have limited service today. richard kelly is joining us. welcome. >> good morning. >> let's start quickly with the impact of the storm bigger than anyone first thought. what impact will have from a macro point of view? >> the estimates always get revised up about so it still may be slightly meer. but even $30 billion to $50 billion puts you at gdp. and then that does not include the fact that there is some sort of rebuilding that you for being
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tore in. >> is it fair to say the bigger the drop, the bigger the bounce back or is that not always true? >> it's not always true. it depends how much of a long term impact there have been. we can go back to katrina which was the largest destruction where the actual costs were around $150 billion. >> you can go to our website to find out why new york is looking a lot leak amsterdam fp has something to do with bicycles. and you can tune in tonight at 8:00 p.m. for hurricane sandy coming together, a benefit concert to aid victims of the storm. hosted by matt lauer. the concert will feature performances by bruce springsteen, sting, billy joel.
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good line up. money collected will be donated to the american red cross relief effort. >> it's final for the jobs report due out at 8:30 achl and it is the final set of numbers and the most important set of numbers before tuesday's presidential election. most forecasts expect a slight rise in the unemployment rate to 7.9%. nonfarm payrolls expected to have a slight pick up from september. has hurricane sandy mitigated the impact or is it a key indicator? >> certainly everyone's focusing elsewhere, certainly i think as soon as people get this number, the first question is what will the payroll look like next month because that's the one impacted by the hurricane and tuesday is the election, what will happen there. so i think people will quickly move beyond this, but it doesn't look like there were any hurricane disruptions to this
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report at all. >> payroll survey, the household survey. when we saw the employment rate dropped, it's because the household number improved. which is more important, the payroll side or the unemployment rate? >> well, whichever side has a much big are move is the one the market will shift on. you're right, the household survey is still volatile. i'd like for another increase back to 7.9 and also the potential of 8%. whereas when you look to the establishment number, i think the market's a little overestimating an increase, we'll probably see it something closer to flat. but nothing is getting that -- >> if the unemployment rate ticks back, there was such big play on it falling last month. >> yeah, 8% is such a magical number. if you keep that 7, it's definitely much better. >> just looking at the ism and the philly fed declining
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yesterday, the initial jobless claims being pretty steady, what does that tell us about the path? >> it tells us that we shouldn't be looking for an improvement. so those who look at the ism and say the ism was better than expected, you're right. when you look through the details of the surveys we've had -- >> >> flash pmi data actually ticked up, the final tick up from the flash last week. euro dollar is down. dollar firmer across the board. what are we pricing in? >> i think when you look across the board, the euro looks somewhat strong. there's a lot of scope for dollar strength into the end of the year. a lot of risk events coming through with the election and fiscal cliff. and there's more potential for the dollar to outperform. >> richard will stick around. in addition to the october jobs report, we'll also get october
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factory orders at 10 a.m. expected to jump nearly 5%. john williams speaks about the economy at 2:45 p.m. and look for earnings from mcgraw hill, thomson reuters, "washington post," good lord, madison square garden, the maker of bubble wrap. there's one one to watch. >> who doesn't like bubble wrap. still to come on the program, we'll take a look at what tuesday's election means for america's chances for falling off the fiscal cliff.
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greece's coalition government on shaky ground. quit because of a scandal over a published list of suspected tax evaders. it they're putting on a unified front before a key vote on austerity measures.
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>> royal bank of scott land has had a loss of just over 1.4 billion pounds mainly due to a clarm on his own debt. the lender has increased its compensation provision by 400 million pounds and will soon enter negotiations to settle libor investigations. it's also likely to be hit. they reiterated the banking industry must make major changes to it culture. >> i guess in general banks didn't live up to the standards of integrity and have the right cultures. so we're paying some of the sins for that. >> some of the world's biggest banks, more capital to deal with financial shocks this according to the rules unveiled by the financial stability board. regulators have decided capital buffers.
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>> the economy remain as top issue for americans while investors have their sights on the impending fiscal cliff. they're facing off over the best path to pursue in order to solve the issue. richard, we've seen even as business leaders try to froes a nonpartisan solution, they're doing so in a partisan way. so how important is it that we see this happen sooner rather than later? >> you certainly want it sooner rather than later. but i think it's also one of these issues where it's become such a focal point of the election, nothing can be done after it and it may be easier afterwards. i think it can be resolved in a
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better fashion. >> there is more talk, though, about -- i guess it depends on the scenario, but if president obama is reelected, will he let it expire so he has more lechblg to lower rates even if he doesn't do so on the super wealthy. how much does the gamesmanship matter? about we go over the cliff, what market impact is that likely to have? >> the market impact in terms of you have a xwchgdp impact of fio seven percentage points. so the market impact can be enormous. the longer you have uncertainty, the longer you hold back treasuries and the greater potential for the fed to come in and extend qe. >>. >> who is more likely to resolve the issue from a market point of view? >> i think romney may have to wait whereas obama probably does it a little bit sooner. >> if you're just joining us,
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final set of numbers on on the u.s. jobs market before the election will be out in just a few hours. >> stocks in europe into the green. >> and raising costs of sandy. one estimate now puts losses from the storm at $60 billion. >> and trade link, we'll hear from the chairman of the investment correspond naturing boa coordinating board of how the country is dealing with qe in the west.
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policy easing raise the specter of high inflation and overheating in developed economies that are expecting faster growth rates. >> indonesia has seen its foreign reserves balloon to more than $100 billion. earlier ross spoke with the chairman of the indonesian investment coordinating board and started asking how the company is dealing with hot money flows. >> the government has to channel p participating easing money coming from the western u.s. and the best way to handle the issue is by building the infrastructure.
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this is the thing we would like to see happen in indonesia. >> are you comfortable with the level of the currency? >> so far yes. if you're talking about competitive enough, somehow they still need an important complaint goods if the currency depreciates too much, it somehow will -- i think the current situation is very good. >> what sort of sectors are you looking for investment in? >> the most growing sector how is the one that relates to the consumer products. because we do have this growing middle class. it's maybe one of the largest in terms of 48% of the total in the economy. but this is the sector that may have profit in the future, but other sector that's also very important is we are looking for the investment that will bring
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the country to the next stage of development. we can't continue to rely only on natural resources or cheap labor. >> you want to develop the service side of the economy. where do you start with that? financial services? what log do you want to see? >> i would say indonesia is one of the countries with the most open foreign investment. but what they would like to see happen is also the support on the logistics. support on insuring that indonesia could maintain about 6.5%. >> for more go to
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and kelly, big issue is the u.s. fed policy having an impact on on emerging markets. >> because most would say if neglect supporting growth in the u.s. will support these markets. does he have a point? >> certainly fuels the currency war discussions. >> and the concern, too, is that the quicker money comes in, the quicker it might leave. are we seeing any evidence of that, though, or is it just a case of be wary of what's happening in the past? >> you've actually seen some of the -- the bigger issue is just the lack of demand and how long this slowdown has gone on. it's really starting to get into some of the capacity and overcapacity issues. >> but is it not actually pushing countries like china to open up their markets more than they otherwise would in order to sort of stem the hot money in
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flows and make it more attractive for people to move their money back out of the country? >> i think the fears are actually leading people slower to open up their markets. the positive side isn't so much the opening of the markets, it's focusing on on the domestic demand creation. but unfortunately, it's still something that's five to ten years in development. >> will there ever be acknowledge the from the fed that the policies do have an impact on weakening the dollar? >> no. i think the if he worries about itself and the dollar is everyone else's problem. >> and you said one surprise this week, that the dollar hasn't been stronger. >> coming out of a hurricane, you worry about funding disruptions of the dollar. you really haven't seen much of that. >> and it if anything, that dollar strengthen that we're seeing may have legs to it? >> i think there's still a lot of strength coming into the u.s. feeding in to the dollar. >> okay. richard kelly, thanks very much for joining us.
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with less than a week to go before china's national congress, it's no surprise that security is tightening around the capital. but china is taking to a whole new level. the government is banning people from buying kitchen knives and remote controlled airplanes. taxi drivers have been told not to open windows or doors when passing important venues for fears of leave lets being spread and pigeon owners are being asked to keep their pets kanled. no word yet on how authorities might keep the wild ones away. still to come on "worldwide exchange," we'll bring you the latest on obama versus romney. more on the u.s. jobs report.
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welcome back to worldwide exchange. here are the headlines from around the world. the final set of numbers on on the u.s. jobs market before the election is due out in just a few hours. forecasts calling for another month of modest but not stellar payroll growth. >> dow, s&p and nasdaq posting their strongest session since mid september. >> the rising cost of sandy, now
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the economic losses could reach $50 billion. >> we'll get into what's happen manage greece later, but first michael bloomberg has endorsed br barack obama. he cites his record on climate change and his steps to reduce carbon consumption as the key. particularly in the wake of the devastation left by sandy. well, for more on the election, joining us is christopher lockwood. his publication has just man a endorsement of its own. and sarah fay began.dn a endorsement of its own. and sarah fay began.en a endorsement of its own. and sarah fay began. a endorsement of its own. and sarah fay began. chris forever, first to you.ghy.
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chris forever, first to you.ny . chris forever, first to you. be. chris forever, first to you.beg. chris forever, first to you.ega. chris forever, first to you.gan. chris forever, first to chris forever, first to you.n. chris forever, first to you.. chris forever, first to you.. chris forever, first to you.. chris forever, first to yoan. chris forever, first to you. >> we debated long into the might, but in the end, we decided to endorse barack obama. >> we debated long into the might, but in the end, we decided to endorse barack obama. >> we debated long into the might, but in the end, we decided to endorse barack obama. >> we debated long into the might, but in the end, we decided to endorse barack obama. >> we debated long into the might, but in the end, we decided to endorse barack obama. >> we debated long into the might, but in the end, we decided to endorse barack obamar >> and it's not because you found anything new. it's because you didn't know who mitt romney is. >> i think that's right. we looked at the president's record, we thought it was okay, but not great. there were things we don't like at all. we think he's rather loss it tile to business. so we were looking if we could for a moderate republican that we might endorse. but we found mitt romney to pot be convincing in that role. >> mitt romney in the first debate you liked. you liked the mitt romney that ran the democratic massachusetts in a bipartisan way. so which romney don't you like? >> we had two big issues with him. the first one really and the most important one is that he
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starts out with a very large tax cut and paying for that by closing exemptions and he doesn't specify which one. we say that's the wrong way to start. america doesn't need another tax cut. the deficit is the problem, not the basic way to tax. >> if you look at how americans feel who would better handle the which i, they're pretty strongly in favor of mitt romney. here's a guy that has a strong background in business who understands how commit works. so americans fundamentally have more confidence in mitt romney to handle economy. it didn't mean that he'll win the election. but if it just comes down to the economy, i think mitt romney has
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the edge. >> chris, do you want to respond to that and to the sense that maybe the average -- that romney goes over well with the average american? are you aichling more at the international business community? >> i think we're aiming at the community in the word, who we would think would be better. we're saying who he we think would best serve america and the world. so we need to look at the deficit, foreign policy, also opinions on social policy. >> one of the things that i found troubling about the economist's endorsement was they cited this stimuluses as a strength of the president. all the studies that have looked at the impact of this failed stimulus policy in my view is
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that it did very little to on have any sustaining impact on the u.s. economy. it largely funded more government spending. and that is fundamentally the problem with barack obama looks to government to solve problems and that is the fundamental choice between these two men. and on issues of the economy and growth and issues of bringer a fair and flatter tax code to the united states, which we desperately need, there is really only one persons who views will allow us to ross per prosper as a country. >> let's look at the stimulus point. we think government should be smaller. but at times when the private sector has seized up and there is no demand, it is quite right for government to step in on to
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that breach. >> so your assertion is if this election was about the economy, romney would win. if it's not about the economy, what is this election swinging on? >> the economy is the driving issue here. the election hinges on lots of factors. turnout in key swing states will matter. what we know about the race right now is that it is incredibly close. on issues related to who do you think performs better on the economy, mitt romney has the edge. so issues of who do you like better, who do you think is more popular, president obama wins. and sometimes particularly among swing voters, those people who make their decisions very late in the process, they tend on to make a gut level reaction about who do i like more, who do i
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trust more. and so on that issue, the president wins. so this is an incredibly close election. you also have the dynamic of the unfortunate tragedy in hurricane sandy which i think has probably bolstered the president's leadership. so really is an interesting race. it will come down to potentially a few thousand votes in a few states. and if it was just the economy, i think mitt romney would win. it's keeping him in the game frankly. >> i want chris to look ahead. look beyond tuesday if we can and sort of focus on one of the issues that is top of everyone's mind which is the fiscal cliff. is this an area where you think from president obama will also do better? >> no, theca cliff is difficult no matter which person wins.
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if president obama does it, i think again there will be no hurry from the republican side to get him out of that. there will be a standoff. so it's difficult either way. >> and you can read plenty more in their new edition out today. christopher and sarah, thanks to both of you this morning. damage estimates from the super storm on the u.s. east coast are still rising. economic losses could total $30 billion to $50 billion. increase is due to the flooding of new york system's flooding system and loss of business because of power outages.
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danielle lee is in one of the hardest hit areas of atlantic city. danielle, what is the cleanup operation like? >> i'm in front of the atlantic city board walk. it's dismantled and empty. fema is now opening disaster centers for people to begin getting federal aid. and all up and down the jersey shore, crews are trying to remove debris, trying to get the power back on. but in parts of new jersey, the entire gas system needs to be rebuilt. hundreds are still locked out and they're losing patience. they're frustrated this recovery cannot happen sooner.
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and there will are new complications caused by sandy, traffic jams, lock lines for gas, everyone gas rationing. and no rest for the weary. those still without power. a winter storm is head this had way and it could get here well before the power is back on next week. s are ross, back to you. >> take a quick look he at the ftse global 300. fractionally lower, but if you key in, you can see people are largely trying to keep positions on hold before we get the jobs report today. 0.2% down for the cac 40 and ibex lower, as well. still to come, short seller positions will be unmasked today and new european rules go into effect. >> we'll take a look at the implications for investors. >> and what to expect from the
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last jobs report before the presidential election.
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we have you're pea an is to
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bes, italian media company, span issuing bank, german telecom company, all the stocks down today. they also have something else in common. >> that's right. short sellers will be unmasked as new european rules go into effect. teams of lawyers are working in to the night to help banks, hedge fund and other investors comply which will require anyone with short positions of more than 2% as of midnight to report to regulators. and positions of more than 0.5% in any stock will be publicly releas released. disclosures could drive investors to other markets like hong kong. others say a version of the rules already in place in portugal hasn't had a major impact. still, this is a major step towards unmasking the short positions of hedge funds which are one of their most closely
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guarded secrets. of course any push back from the u.s. will yet again pit european regulators against their american impact. what do you think the impact of the rules could be? is there a reason to be cautious? about worldwide@cnbc.c, @cnbcwex, @ kelly_evans or @rosswestgate. >> a story you want to keep your eyes on. starbucks results boosted by several promotional offers. starbucks still dealing with weak consumer spending in the uk and western europe, but the company raise its full year guidance. >> i don't want to overstate might go, but the company is firing on all cylinders and we're optimistic about the
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holiday season. and as i said, we're beginning to see many of the things that we put this place in the u.s. business in 2008 during our own transformation beginning to it take hold in western europe. it will be a long term effort, but we're seeing positive signs. >> starbucks stock in frankfurt today, you can see doing pretty well. up 9%. good move for starbucks. >> huge. that's in track further trade. aig meanwhile swinging to a third quarter profit beating forecasts of a it tr posting a nearly $4 billion net loss a year ago. the company saw improvement across all its insurance businesses. the ceo tells cnbc aig's office this is lower manhattan were without you power this week due to sandy, but the company did operate without interruption and he says it's too early to estimate the financial impact of the storm. aig shares were i believe weaker
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but not much action today. we'll double check that. also apple's latest innovation, the ipad mini, hitting stores in two dozen countries today. several new york apple stores today will be closed because they don't have power due to hurricane sandy. it costs $329 for wi-fi only on version. that is more expensive than rival devices. apple shares adding 0.3% in frankfurt this morning. and microsoft is reportedly working with its asian supplier to get its own smartphone design. reports suggest the screen it is between 4 and 5 inches. stock in frankfurt up three quarters of a percent.
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>> circling back through the companies, as the rules go into effect. relatively small companies maybe those under $10 billion with significant short positions will be those to watch. if we start to learn that high profile investors in the u.s. have short positions expect volatility. >> market reaction would normally be -- is it the flip side of warren buffett buying in on to a stock? >> you'd think, but again, it does depend on whether they think the position is vulnerable enough to go after it. but could be something to kick in volatility as disclosures become part of what we're watching. you're watching "worldwide exchange." if you're just joining us, these
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will your headlines. final set of numbers on the u.s. job market due out in just a few hours. >> and rising costs of sandy is one estimate puts losses from the storm up to $50 billion.
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european stocks pretty flat. pmi ichlis were reviewed up. germany still weak. hasn't helped the euro. the dollar is up across the board. >> that's right. and u.s. futures to give and you
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quick sense of what's happening. just for the most part the dow jones industrial average looking to shed about 20 points. but take our attention real our attention is really on the u.s. jobs report. the final set of numbers before the election on tuesday. now there's expectations that the u.s. and unemployment report could tick up to 7.9% or even 8%. nonfarm payrolls are also expected to be stronger adding 125,000 jobs versus 114,000 in september. now, that comes along with plenty of other check reports, too. >> let's remind you what's in addition to that october jobs report. october factory orders out at 10:00 eastern. forecast to jump nearly 5%. john williams speaks today about the economy. earnings front, look for numbers from chevron, information resin investment, mcgraw hill, thomson reuters, "washington post."
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but today is about the unemployment report. how are we going to trade to this number? >> good morning, ross and kelly. th looks like the market's built in a better than expected number. we had a big rally yesterday. i think any number under 135 will create selling pressure. because we're up against resistance and the market is a little frothy. so i think if it's not a major beat, i think we sell off a little bit. >> the dollar getting traction across the board. euro-dollar below 129. dollar index up at fresh seven week highs. is that just a sign people are
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squaring themselves off ahead of a lot of event risk? >> i think that's always the days. we have the big jobs number as a factor, the election coming up, so there is a lot of reason to square here. and yesterday being the end of the year for all the mutual funds we have the news risk coming up the next couple days. >> do you buy volatility? >> i think we'll start to see volatility and some action. there is some fear creeping into the market. for the last six, seven months, there's been no fear. volatility has been collapsing. i think now in the last couple weeks, you're starting to see a little bit of peak and we're starting to see whether any news item here that is a major miss one way or the other is going to
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create some mamgt movements. >> usually markets are more supportive, the november through early spring period. november is typically a good month. so will the forces prevail? >> well, you know, it is the santa claus rally, the whole they think that we look for in the fourth quarter. i think we'll have probably end p rallying towards the end of the year, but i think there's probably some source of a little bit of news bomb that will set us into a little bit of selling pressure. i think we'll see 1375 in the s&p before the year is over. i wouldn't be surprised if we saw it in the next four or five days. but then i think we'll settle down and get some sort of rally at the end of the year because typically as you've said, this is a very strong part of the year and typically a very bullish part of the year.
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>> if we get a tick up in the unemployment rate today, does that have any bearing on how you might raid ahead of the election? >> the headline number itself, the rate itself is not really a number that i pay attention to. the true number in this country is probably 16% to 17%. so last month 7.8 was strictly an anomaly that the overall headline number is 7. 8, but it was a number that nobody agreed with. >> you don't think it has political implication. >> no, i think the job number, how much growth we have will have implications. >> good to see you. have a great day.
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>> have a great day. thanks for joining us. >> want to bring you an update on hurricane sandy. the damage estimate from this week's super storm raising, could be up to $50 billion. this is due in large part to the flooding of new york city's subway system and tunnels. also power outages. new york will bear most of the costs white the rest goes to other states. >> combination of tax hikes and government spending cuts, business groups including fortune 500 ceos and u.s. chamber of commerce affecting the best particles to solve the issue. >> we know your attention is really focused today. one more sorry perhaps you want to leave people with?
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>> one more story before we go. the bunnies are coming to indiat to leave people with? >> one more story before we go. the bunnies are coming to india to leave people with? >> one more story before we go. the bunnies are coming to india. the country's first playboy club. but no short shorts. the club's operator says the iconic waitress bunny costumes will be redesigneded to meet indian sense abilities. the first clubs will open. >> your focus is short shorts. focus on a different are tkind shorts. the regulations have huge implications. people will be able to know which henk fudge funds have sho and why. >> there will be a lot more jobs discussion. we hope and you have good weekend whenever it starts. ♪
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♪ ♪ [ male announcer ] some day, your life will flash before your eyes. ♪ make it worth watching. ♪ the new 2013 lexus ls. an entirely new pursuit.
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it is jobsfully. sandy couldn't disrupt this, the final employment report before election day. the road to recovery from sandy a little bit bumpy. power is slowly returning for some, but other areas could be dark for at least another week. and the gas lines, if you're not in the area, you have noed idea what this can really be like. and as the map world turns, apple stores around the country will start to sell the new ipad mini. it's friday, november 2 pd. we have four days now until election day, 2012. "squawk box" begins right now.. we have four days now until election day, 2012. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. i' b


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